Medical malpractice insurance is a specialized type of professional liability insurance that protects physicians from the liability associated with practicing medicine, including allegations of malpractice. Medical liability insurance is required in nearly every state and most healthcare systems. The primary types of malpractice coverage for physicians are Claims-Made, Nose Coverage, Tail Coverage, Occurrence, and Claims-Paid.
Claims-Made Insurance
The most common type of malpractice coverage is a claims-made policy. Claims-made insurance covers claims filed during the policy period only. A claims-made policy will only provide coverage if the policy is in effect both when the incident took place and when a lawsuit is filed.
Pros– Claims-made policies are typically cheaper than other types of malpractice insurance.
Cons– If you have a claims-made policy from 2010-2015, it would not cover a claim filed in 2016 for an event that happened in 2015. Therefore, nose and tail coverage may be necessary, which increases the overall cost.
- Nose coverage -is a supplemental insurance that can be added to a claims-made policy. If a physician is changing insurance providers, he/she can purchase nose coverage to ensure claims that happened from a previous policy do not go uncovered. Nose coverage is less expensive than using tail coverage from a prior policy.
- Tail coverage – is another supplemental insurance that can be added to a claims-made policy. Tail coverage protects against claims that occurred when the policy was in effect but were not filed until after the policy ended. Physicians may purchase tail coverage if they are changing employers, taking a leave of absence or retiring. Tail coverage added to a claims-made policy can be expensive because it is covering potential claims for a lengthy period of time.
Occurrence policies
Occurrence insurance covers claims occurring during the period of coverage, even if the claim is filed after the policy ends. An occurrence policy is similar to a claims-made policy with a tail coverage.
Pros– Occurrence policies provide coverage for incidents that occur during the policy period, regardless when the claim is filed. Occurrence policies are more desirable because they tend to cover more and do not require tail coverage.
Cons– Occurrence policies are not available in all states. They are also less frequently offered by employers. In addition, they are more expensive and have higher premiums.
Claims-paid policies
Claims paid policies are rarer than claims-made or occurrence policies. A claims-made policy only protects the physician if he/she is insured by the policy when the case is settled. This type of policy often forces physicians to keep the same policy for years while a case is being negotiated to ensure it will be covered.
Pros– They are cheaper than claims-made policies.
Cons– Although they are less expensive, they are also more restrictive. Claims-paid policies are more demanding and make it more difficult to switch insurers. In addition, only a few insurers (and in a few states) offer this policy.
When considering medical malpractice insurance, it is important to understand what is and is not covered to ensure adequate protection. In general, policies may cover attorney expenses, court costs, medical damages, punitive and compensatory damages. However, it is also necessary to know the amount of coverage for each occurrence and all claims made. Speaking with a professional regarding coverage options will help ensure you select the optimal type and amount of insurance to meet state requirements and ensure your personal and private practice protection.
References:
https://www.naic.org/cipr_topics/topic_med_mal.htm
Read also:
What to Do When a Patient Threatens to Sue – https://www.hospitalrecruiting.com/blog/2218/what-to-do-when-a-patient-threatens-to-sue/
Knowledge About Malpractice Suits Can Give You Some Peace – https://www.hospitalrecruiting.com/blog/3330/knowledge-about-malpractice-lawsuits-can-give-you-some-peace/
